EXHIBIT 4.2
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT is entered into as of the 27th day of _October, 2003, by and
between __TISSERA_, INC., a company incorporated under the laws of the State of
Washington and maintaining its principal place of business at x/x Xxxxxxxxxx,
Xxxxx, Xxxxx "Toyota Towers" 00 Xxxx Xxxx Xx. Xxx-Xxxx 00000 XXXXXX the
"COMPANY") and Xx. Xxxxx Xxxxxxx, Israeli I.D. number 05642601-8, residing at 00
Xxxxx xxxxxx Xxxxxx_, Xxxxxx (the "EXECUTIVE"). WHEREAS: The Company is engaged,
inter alia, in the research, development, manufacturing and marketing of methods
of organ transplantation utilizing developing nephric and other types of
tissues; and
WHEREAS: The Company desires to employ the Executive as the Chief Executive
Officer (the "CEO") of the Company, and the Executive represents
that she has the requisite skill and knowledge to serve as the CEO
of the Company and she desires to engage in such employment,
according to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the respective agreements of the parties
contained herein, the parties agree as follows:
1. EMPLOYMENT
(a) The Company agrees to employ the Executive and the Executive agrees
to be employed by the Company on the terms and conditions set out in
this Agreement.
(b) The Executive shall be employed as the CEO. The Executive shall
perform the duties, undertake the responsibilities and exercise the
authority customarily performed, undertaken and exercised by persons
situated in a similar capacity, subject to the direction of the
Board of Directors of the Company. The Executive shall report
regularly to the Board of Directors with respect to her activities.
(c) The Executive shall participate in all the meetings of the Board of
Directors, as an observer, without any voting rights.
(d) Excluding periods of vacation, sick leave and military reserve
service to which the Executive is entitled or required, the
Executive agrees to devote her time and attention to the business
and affairs of the Company and its subsidiaries as required to
discharge the responsibilities assigned to the Executive hereunder.
(e) This Agreement is a personal services agreement governing the
employment relationship between the parties hereto. This Agreement
shall not be subject to any general or special collective employment
agreement relating to executives in any trade or position that is
the same or similar to the Executive's, unless specifically provided
herein.
(f) The Executive's position, duties and responsibilities hereunder
shall be in the nature of management duties that demand a special
degree of personal loyalty and the terms of Executive's employment
hereunder shall not permit application to this Agreement of the Law
of Work Hours and Rest 5711 - 1951. Accordingly, the statutory
limitations of such law shall not apply to this Agreement. The
Executive shall not be entitled to additional compensation from the
Company for working additional hours or working on holidays or
Sabbaths, as required by the Company.
1
2. BASE SALARY
(a) The Company agrees to pay to the Executive during the term of this
Agreement a cost of salary of 25,000 New Israeli Shekels ("NIS") per
month (the "BASE SALARY").
(b) Not later than June 1, 2004, the Base Salary shall be increased to a
minimum of 50,000 shekels per month or such higher amount as
determined by the Board of Directors.
The Base Salary shall be payable monthly in arrears, no later than
the 10th day of each month. (c) Each monthly payment of Base Salary
shall be adjusted to the consumer index rate as published on the
date of payment.
(d) Bonus: Commencing the second year of Employee's engagement with the
Company (the bonus will be paid at the end of the respective year),
Executive shall be entitled to a yearly bonus, provided however that
Employee shall meet the Company's goals and targets as shall be
specified by the Board of Directors in each annual budget.
(e) Yearly salary review and raise will be decided by the board
3. STOCK OPTION
(a) Subject to applicable law, the Company hereby undertakes to grant to
Executive an option (the "OPTION") under the Company's Share Option
Plan (a copy of which is attached hereto as Exhibit "A"). The Option
shall entitle the Executive to purchase such number of Ordinary
Shares of the Company ("ORDINARY SHARES") representing five percent
(5%) of the Company's issued and outstanding share capital, on a
fully diluted and as converted basis, calculated as of the date of
grant (as of the date of completion of the initial investment in the
public company. The Option shall vest and become exercisable in 36
equal (monthly linear) installments of 1/36 of the 5% starting as
follows: 6/36 of the 5% at the end of the 6th month from signing
this agreement and additional 30 installments of 1/36 of the 5% at
the end of each month starting the 7th month from signing this
agreement. at the end of each month respectively from the date of
grant and shall be exercisable by the Executive at any time during a
period of five (5) years as of the date of grant, but in any case
not later than six (6) months after termination of this Agreement
(b) Notwithstanding the foregoing, termination of this Agreement by
reason of disability (as defined below) or death of the Executive
will not, in any way, impair and/or derogate from the Executive's
right to exercise the Option. The term "disability" shall mean, any
physical or mental injury as result of which, the Executive remain
incapable of performing the services for a period of three (3)
consecutive months.
2
4. EXECUTIVE BENEFITS
The Executive shall be entitled to the following benefits:
(a) Sick Leave. The Executive shall be entitled to fully paid sick leave
pursuant to the Sick Pay Law 5736 - 1976.
(b) Vacation. The Executive shall be entitled to an annual vacation of
23 working days per year.. Unused vacation may be accumulated from
year to year but not more than 3 years.
(c) The CEO shall be entitled to Recreation pay according to applicable
law, but not less than 10 recreation days a year.
(d) Manager's Insurance. The Company shall obtain on behalf of the
Executive a manager's insurance policy, a pension fund or a
combination thereof (the "MANAGER'S INSURANCE POLICY"), as
determined by the Executive, in the name of the Executive, and shall
fund the Manager's Insurance Policy as follows: 8.33% of the
Executive's Base Salary shall be allocated to severance pay; 5% of
the Executive's Base Salary shall be allocated to pension fund
payments, provided that the Executive contributes an additional 5%
of the Executive's Base Salary; and 2.5% of the Executive's Base
Salary shall be allocated to disability pension payments.
If the Executive chooses a combination of manager's insurance and
pension fund, the contributions to the pension fund shall be as
follows: 8.33% allocated to severance pay; 6% contribution to the
providence fund by the Company; and 5.5% contribution to the
providence fund by the Executive.
Contribution of the Company to the Manager's Insurance Policy shall
be on account of the Company's severance pay obligations.
(e) Continuing Education Fund. The Company shall contribute a sum equal
to 7.5% of the Executive's gross salary toward a continuing
education fund (the "CONTINUING EDUCATION FUND"), provided that the
Executive contributes an additional 2.5% of the Executive's gross
salary to such Continuing Education Fund. Use of the funds in the
Continuing Education Fund shall be in accordance with its by-laws.
(f) The company will pay the CEO for the traveling expenses in her
private car (according to Heshev's rate)calculated each month
according to the reading of the milage between the end and the
beginning of the month less 10% private use.
3
(g) Telephone Costs; Cellular Phone. In recognition of the necessity of
the use of cellular phone to the efficient and expeditious
performance of the Executive's services, duties and obligations to
and on behalf of the Company, the Company shall provide the
Executive, at the Company's sole cost and expense, a cellular phone
(with working line) to be chosen by the company, (including grossing
up for purposes of income tax).
(h) Company will provide the CEO with a telephone line at her home, for
use by the CEO, and will cover all expenses related to this line
(including grossing up for purposes of income tax).
(i) The Company will cover the CEO's expense regarding membership fee of
the Medical Organization (Histadrut Refuit).
(j) Out of Pocket Expenses. The Company shall pay or reimburse the
Executive for expenses incurred on behalf of the Company during
business trips outside Israel (including airline tickets and
accomodation). Reimbursement of such reimburseable expenses shall be
made upon the presentation by the Executive to the Company of
itemized accounts or receipts, satisfactory to the Company.
(k) Officers' Liability Insurance. The Company shall obtain on behalf of
the Executive officers liability insurance and shall provide the
Executive with a written undertaking to indemnify and release the
Executive in accordance with the Companies Law 5759-1999.
5. TERMINATION
(a) Either party may terminate this Agreement and the employee-employer
relationship between the Executive and the Company at any time upon
sixty (60) days (the "NOTICE PERIOD") written notice to the other
party specifying the effective date of termination (the "TERMINATION
DATE").
(b) During such Notice Period following termination of this Agreement by
the Company, the Executive shall be entitled to compensation
pursuant to Section 2 and to all of the benefits set forth in
Section 4. During such Notice Period following termination of this
Agreement by the Executive, the Executive shall be entitled to
compensation pursuant to Sections 2, 3 and 4 up to the date of the
executive's notice. Without derogating from the above, after
termination of the Notice Period, the Executive shall be entitled to
payment of her Base Salary, executive benefits and stock options as
set forth in Sections 2, and 4 for an additional period of three
months.
(c) During the Notice Period, the Executive shall transfer her position
to her replacement in an orderly and complete manner and shall
return to the Company all documents, professional literature and
equipment belonging to the Company, which may be in her possession
at such time.
4
(d) At the end of the Notice Period, the Company shall transfer to the
Executive ownership of her Manager's Insurance Policy, including
severance payments and Continuing Education Fund. The Company and
Executive agree and acknowledge that in the event the Company
transfers ownership of Executive's Manager's Insurance Policy to the
Executive, the severance portion thereof shall constitute payment
towards any severance pay the Company may be required to pay to the
Executive pursuant to the Severance Pay Law 5727-1963.
6. COMPETITIVE ACTIVITY
During the term of this Agreement [and for a period of twelve (12)
months from the Termination Date of this Agreement,] the Executive
will not directly or indirectly:
(i) Carry on or hold an interest in any company, venture, entity
or other business (other than a minority interest in a
publicly traded company) which competes with the products or
services of the Company or its subsidiaries, including those
products or services contemplated in a plan adopted by the
Board of Directors of the Company or its subsidiaries (a
"competing business");
(ii) Act as a consultant or executive or officer or in any
managerial capacity in a competing business or supply in
competition with the Company or its subsidiaries services
("restricted services") to any person who, to her knowledge,
was provided with services by the Company or its subsidiaries
any time during the twelve (12) months immediately prior to
the Termination Date;
(iii) Solicit, canvass or approach or endeavor to solicit, canvass
or approach any person who, to her knowledge, was provided
with services by the Company or its subsidiaries at any time
during the twelve (12) months immediately prior to the
Termination Date, for the purpose of offering restricted
services or products which compete with the products supplied
by the Company or its subsidiaries at the Termination Date; or
(iv) Employ, solicit or entice away or endeavor to solicit or
entice away from the Company or its subsidiaries any person
employed by the Company or its subsidiaries any time during
the twelve (12) months immediately prior to the Termination
Date with a view to inducing that person to leave such
employment and to act for another employer in the same or a
similar capacity.
7. NOTICE
For the purpose of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to
have been duly given when personally delivered or sent by registered
mail, postage prepaid, addressed to the respective addresses set forth
below or last given by each party to the other, except that notice of
change of address shall be effective only upon receipt.
The initial addresses of the parties for purposes of this Agreement
shall be as follows:
The Company: x/x Xxxxxxxxxx, Xxxxx, Xxxxx "Toyota
Towers" 00 Xxxx Xxxx Xx. Xxx-Xxxx 00000
XXXXXX
The Executive: 00 Xxxxx xxxxxx Xxxxxx Xxxxxx 00000
8. MISCELLANEOUS
(a) This agreement is subject to approval by the board of directors of
the Company.
(b) No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and the Company. No waiver by
either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time.
(c) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Israel.
(d) The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof.
(e) This Agreement constitutes the entire agreement between the parties
hereto and supersedes all prior agreements, understandings and
arrangements, oral or written, between the parties hereto with
respect to the subject matter hereof. No agreement or
representations, oral or otherwise, express or implied, with respect
to the subject matter hereof have been made either party which are
not expressly set forth in this Agreement.
(f) This Agreement shall be binding upon and shall inure to the benefit
of the Company, its successors and assigns, and the Company shall
require such successor or assign to expressly assume and agree to
perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such
succession or assignment had taken place. The term "SUCCESSORS AND
ASSIGNS" as used herein shall mean a corporation or other entity
acquiring all or substantially all the assets and business of the
Company (including this Agreement) whether by operation of law or
otherwise.
(g) Neither this Agreement nor any right or interest hereunder shall be
assignable or transferable by the Executive, his beneficiaries or
legal representatives, except by will or by the laws of descent and
distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal personal representative.
5
(h) The provisions of Section 6 of this Agreement shall survive the
rescission or termination, for any reason, of this Agreement, and
shall survive the termination of the Executive's employment with the
Company.
(i) The section headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation
of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
TISSERA, INC. XX. XXXXX XXXXXXX
----------------------------------------------------
BY: XXX XXXX
TITLE: DIRECTOR
